Correlation Between SPDR Global and Global X
Can any of the company-specific risk be diversified away by investing in both SPDR Global and Global X at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPDR Global and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Global Dow and Global X Funds, you can compare the effects of market volatilities on SPDR Global and Global X and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPDR Global with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Global and Global X.
Diversification Opportunities for SPDR Global and Global X
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Global is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Global Dow and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and SPDR Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPDR Global Dow are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of SPDR Global i.e., SPDR Global and Global X go up and down completely randomly.
Pair Corralation between SPDR Global and Global X
Considering the 90-day investment horizon SPDR Global Dow is expected to generate 0.79 times more return on investment than Global X. However, SPDR Global Dow is 1.26 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Funds is currently generating about -0.13 per unit of risk. If you would invest 13,614 in SPDR Global Dow on August 30, 2024 and sell it today you would earn a total of 77.00 from holding SPDR Global Dow or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Global Dow vs. Global X Funds
Performance |
| Timeline |
| SPDR Global Dow |
| Global X Funds |
SPDR Global and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Global and Global X
The main advantage of trading using opposite SPDR Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Global position performs unexpectedly, Global X can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Global X will offset losses from the drop in Global X's long position.| SPDR Global vs. iShares Global 100 | SPDR Global vs. iShares MSCI Belgium | SPDR Global vs. iShares MSCI Netherlands | SPDR Global vs. iShares Dow Jones |
| Global X vs. SPDR Global Dow | Global X vs. First Trust Dow | Global X vs. SPDR SP Capital | Global X vs. First Trust Capital |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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